THE FINAL FURLOUGH? DECISIONS TO BE MADE AS GOVERNMENT SCHEME NEARS ITS END

The Government furlough scheme is due to be phased out completely from 30th September this year and many employers will now be facing difficult decisions on the future of their workforce in a changed world.

Introduced in Spring 2020, ‘furlough’ was a novel concept in the UK, but in the months since its introduction has become ingrained in our business vocabulary. As of 14th July this year, over 11.6 million roles were supported by furlough arrangements, and by the time the scheme comes to an end it will have cost an estimated £66bn.

When the scheme was first announced we experienced an increase in calls of over 300% to our Legal Helpline on employment matters; the unusual nature of the scheme left both employers and employees needing guidance on their rights and responsibilities.  We saw a further spike in calls in September and October 2020 as the original end date of the furlough scheme approached, this coincided with reports that a record number of roles were at risk of redundancy. At that time many social distancing restrictions were still in place and with threats of further lockdowns imminent, many businesses were unsure how to continue to support their employees and restricted business operations.

Though many market commentators are speculating on a wave of redundancies post-September this year, we remain optimistic.  In July, the BBC reported the lowest level of planned redundancies since 2015 and this is certainly reflected in the reduced number of calls we’ve received to our Legal Helpline. 

Despite these encouraging numbers we know that for some businesses, redundancy will be inevitable, if this is the case, following correct processes will be critical to protect businesses from any employment litigation and ensure their employees are treated fairly and with compassion during this difficult time.

Plan ahead

As the scheme comes to an end, businesses should be planning ahead to assess any reduction in business and how their current employee arrangements support this.

If redundancies are considered necessary it is vital that the correct procedures are followed.  Our Employment Guide provides detailed guidance on redundancy procedures along with useful templates that can be adapted to reflect individual circumstances.

If you’re a policyholder considering redundancies, we recommend that you call the Legal Helpline for further guidance.

Michael Jenkins, Head of Legal Advice, Arc Legal Assistance

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